Gold Price Forecast: XAU/USD V-Shaped Slingshot Back to Resistance

Gold Technical Forecast: XAU/USD Weekly Trade Levels

• Gold marks V-shaped monthly recovery- November opening-range preserved
• XAU/USD range set below key resistance confluences- breakout pending
• Resistance 2006/17, 2035, 2075/81 – Support 1925/33, 1881/91 (key), 1823

Gold prices surged nearly 4% off the monthly lows with XAU/USD now testing resistance into multi-month highs. The November opening-range is preserved heading into the final week and the focus remains on a breakout in the days ahead. These are the updated targets and invalidation levels that matter on the XAU/USD weekly technical chart into December open.

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Gold Price Chart – XAU/USD Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; XAU/USD on TradingView

Technical Outlook: In last month’s Gold Weekly Price Forecast we highlighted that XAU/USD had marked a major reversal off downtrend support with a breakout of the May downtrend shifting the focus higher. We noted that, “pullbacks should be limited to the 52-week moving average IF price is heading higher on this stretch with a close above 1988 needed to fuel the next leg.” Gold plunged nearly 3.9% in the following weeks before rebounding off confluent support last week around the 38.2% retracement of the October rally.

Gold is back at the October high-close at 2006 with the record high-week close just higher at 2017- a breach / weekly close above this threshold is needed to mark uptrend resumption towards the record high-close at 2035. Critical resistance steady at the 2020 swing high / 2023 record high at 2075/81- look for a larger reaction there IF reached.   

Weekly support rests with the 52-week moving average / 38.2% retracement at 1924/33 – losses should be limited to this zone IF price is heading higher on this stretch. Medium-term bullish invalidation now set to 1886/91- a region defined by the 61.8% Fibonacci retracement and the May 2021 high-week reversal close.

Bottom line: Gold has covered the entire monthly decline and the V-shaped recovery keeps the focus on a breakout of the November opening-range for guidance. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- be on the lookout for an exhaustion low while above the yearly moving average with a weekly close above 2016 needed to fuel the next major move in gold. I’ll publish an updated Gold Short-term Technical Outlook once we get further clarity on the short-term XAU/USD technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

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